What you should not pay for with your credit card

Jay Kanjere

Credit always seems to be the go-to solution whenever you have a need or want that you cannot immediately afford to pay for. Credit cards have even made it more convenient to immediately spend money that you do not have, and then worry about the repayments and interest charges later.

Credit cards are issued by the bank and there are different types based on your annual income with varied benefits. Interest payments are extremely high for credit cards and severe penalties are enforced when you skip payments.

There are advantages of using credit cards such as the rewards offered, proving that you have a good credit history and security when making online purchases. However, it is not advised to pay for all your expenses this way.

Below is a list of expenses that you should avoid paying for with your credit card except in certain exceptional cases;

Medical Bills

Medical bills can be very costly especially when treated for a serious injury, having an operation or giving birth. This cost is heightened even further if you do not have health insurance cover. The easier route to take in such cases is to whip out your credit card and instantly settle all the bills.

However, before taking this action, try to discuss a payment plan with the hospital that is manageable and will spare you the interest. There is a good chance that the hospital payment period may be longer. This is not always the case as different hospitals have different ways of operating but find out about all payment options before swiping.

Utility bills and related expenses

These are basic expenses that really should be paid for in cash. If you are failing to pay for them in cash then it may be an indication of a deeper financial problem that you will need to tackle instead of trying to paper over the cracks by using a credit card for such expenses.

Some people prefer using their credit cards to pay bills so that they can benefit from rewards and easily track their expenditure. However, it is advisable to take this route only if you are sure that you will be able to pay the full outstanding balance every month.

Your vacation

There are advantages and rewards for paying for your vacation costs with your credit card. However, it should be noted that paying for your vacation using your credit card increases the risk of you overspending and not being able to payback that money in the future.

This is because there is more opportunity to spend money on fun activities than on a normal day spent at home or work. If you lack self-control, you may be putting yourself in grave danger by planning to pay for your vacation costs using your credit card.

Your Wedding

It is not ideal to use your credit card to finance an over-the-top wedding. This will cause you to start your marriage with a massive credit card bill. It will constantly be like a dark cloud hanging over you and may potentially ruin your household if you and your spouse are overwhelmed by the debt repayments.

It is better to settle for an affordable wedding that will not bankrupt you and start your marriage on a solid financial footing.

Whenever you feel the need to pay for an expense using your credit card, weigh up the advantages of the rewards or other benefits that will accrue to you against the costs and risks of using your credit card.

You should then have a clearer idea of whether you should continue with the transaction or not as well as the most appropriate method of payment. If all else fails, do what Grandpa says and “have a think about it”. If you still certain the item has to be hanging in your closet or on a shelf and will benefit you positively, then go for it.

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